Missouri Hospital Assoc. v. Azar, No. 18-1778 (8th Cir. 2019)
Annotate this CaseMHA filed suit challenging the part of DSH's 2017 Rule defining "costs incurred" as "costs net of third-party payments, including, but not limited to, payments by Medicare and private insurance." The Eighth Circuit reversed the district court's grant of summary judgment for MHA, holding that the statute did not delegate to the Secretary unfettered discretion to determine "costs incurred;" the terms "costs incurred" and "net of payments" have plain, unambiguous meanings; and MHA's interpretation of "costs" and "payments" was not plainly mandated by the structure of the statute. Therefore, the court held that the Secretary's interpretation was reasonable in light of the statute's purpose and design. Under Missouri's plan, the court explained that the State redistributes overpayments above a particular hospital's DSH annual limit proportionately among other DSH hospitals that are below their hospital-specific limits, redistributions that should benefit the most imperiled DSH members of the MHA.
Court Description: Loken, Author, with Wollman and Stras, Circuit Judges] Civil Case - Medicaid. The Secretary of HHS appeals district court's grant of summary judgment to Missouri Hospital Association, which challenged the final rule (42 U.S.C. sec 1396r-4(g)(1)(A)) defining "costs incurred" as "costs net of third-party payments, including, but not limited to payments by Medicare and private insurance" in calculating disproportionate share hospital payments. The district court concluded the Rule was contrary to language in the statute explaining that only payments that offset Medicaid costs are non-DSH Medicaid payments. The statute does not delegate to the Secretary unfettered discretion to determine "costs incurred"; the terms "costs incurred" and "net of payments" do not have plain, unambiguous meanings; and MHA's interpretation is not plainly mandated by the statute. The Secretary's interpretation is reasonable in light of the statute's purpose and design. Taking into account payments by private insurance ensures that only "uncompensated care costs" are reimbursed. The district court's orders are reversed. Judge Stras concurs in the judgment.
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